REPORT POWERED BY Retail 2020: The Year of Transformation 2 FOREWORD POWERED BY The times, they are a-changin’... Because it’s not just a sweater Avery Dennison’s head of RFID Market Development, At Avery Dennison we see technology Apparel Uwe Hennig discusses the significant shifts as a way to create a world that can be better connected, better harmonized that have occurred in retail. and more in-sync. A world where digital ID technologies PPAREL RETAILERS HAVE And all this information needs to be introduce greater accountability, seen incredible transforma- easily accessible – at their fingertips. authenticity, visibility and integrity to tions over the past 10 to 15 Being a data-driven company apparel lifecycles. years,A and even more has been accel- does not mean just hoarding erated by the COVID-19 pandemic. masses of data, it means antici- A world where a sweater can tell you its When you look back at the retail pating needs, collecting informa- origin story. From start to end. And all landscape of, let’s say, 2005, you tion in real-time, and analysing points in between. quickly realise how massive that it to present it back to custom- change has been: back then the ers at a time and place they are retailer was in the driver’s seat. most receptive to it. Data can also Customers could only shop on the help you develop digital micro- Made Possible high street or purchase through fulfilment solutions that are more by Avery Dennison mail orders and printed catalogues. flexible and efficient. This enables eCommerce was in its infancy and you to know how specific products systems were far less complex. are being moved across your value Now online stores are ubiqui- chain, or if a product is a bestseller tous. The high street is merely an in one store and a shelf warmer in option out of many. Customers the other. And you can learn this Uwe Hennig, are no longer passengers, instead, quickly, avoiding margin losses in they have taken over the driv- an era where brands launch six to RFID Market Development, eight collections Apparel, EMEA, per year. Australia, India You just need to make the most of Some things, on it. Undoubtedly the retail industry the other hand, aren’t a-changin’. has gone through seismic changes.” At the end of the “ day, you still want er’s seat. And it’s up to you, the to please your customers, and get a retailer, to avoid becoming a pas- good return on investment. Digital senger and to instead become the Identity technologies and the Internet map that leads the customer to the of Things (IoT) can help you achieve right destination. both. They enable you to maximise So, what do today’s powerful cus- the consumer experience so that your tomers want, and what do you need brand can anticipate, rather than fol- to guide them in the right direc- low, your customers’ needs. tion? It is something that is avail- It all starts with a simple first step: able everywhere and extremely rare adding digital identifiers to prod- simultaneously: data. Customers ucts, and connecting them to the want to know which products are IoT. In fact, the very first step is even available when and where, how they simpler: checking out the articles in were produced, their ecological foot- this report. I wish you a pleasant and print, how they can be recycled… insightful read! ■ rfid.averydennison.com/apparel 4 INNOVATION POWERED BY INNOVATION POWERED BY 5 Australia, time to innovate 6one5 Retail Consulting Group director Bill Rooney believes it’s time for local retailers to reap the rewards of tech transformation. ETAIL IS BECOMING divided least 70% of Australian retail busi- radio waves and receive signals world including Zara, H&M, Uniqlo, of replenishment. Its RFID-equipped Bilbao store between the digital champi- nesses as traditional analog busi- back from the RFID tag. Nike, Adidas and Target. Put simply, out of ons and the legacy laggards. nesses currently. Used in the fashion industry, they It has been less widely imple- stocks and theft can be was selling more than four old RCOVID-19 has simply reduced the Meanwhile, Amazon is driving can take the form of large tags that mented in Australia’s billion dollar immediately identified time span to be digitally enabled customer experience via an R&D are removed at the checkout, right fashion retail industry, due to the and resolved. sites combined even though it from five years to two years. spend of US$22.62 billion per annum through to the new chip the size of cost of tags and readers and lack of Retailers can now “operated on less space and 20% Survival and success will depend with approximately US$13 billion a dust grain that are permanently computer processing capacity. have accurate stock- on retailers’ digital and analytical spent on IT. sewn into the garment. However, with the cost shrinking takes completed in four less inventory. capabilities, utilised to improve the To put this into perspective, the One of the perennial issues for dramatically in the past few years – to six weeks and at the customer experience, attract new business has had several thousand retailers is excessive stock, which nor- from US$3 a tag to now less than 20 same time use scanners tactically to In an interview last year, Inditex customers and drive down costs. engineers working on artificial mally eventuates as a result of poor cents – the potential for Australian identify out of stocks on the shop floor. chairman Pablo Isla said the busi- Not having this capability is like intelligence for the last seven years. demand planning, ineffective use retailers is now ripe. This technology is available to ness model relied on low inventory analog phones (traditional retailers) For the purpose of this report, we of analytics to predict sell-through The goal is the right stock in the all sized retailers and where stock and quick sell-through. having to compete against smart will focus on how digitised inventory and minimise margin shrinkage and right place at the right time, and this issues are present. It is one of the At the time, its RFID-equipped phones (digital enabled retailers). can assist the retail metamorphosis inventory visibility problems. cannot be achieved without RFID easiest and quickest ways to start Bilbao store was selling more than They will not be in the game and required to survive 2020 and beyond. This is especially prevalent in the which provides an accurate view of resolving these complex issues. four old sites combined even though we all know what happened to Nokia Radio Frequency Identification fashion industry. stock in store, in the stock room, in Zara’s parent company Inditex for it operated on less space and 20% and Blackberry’s phone businesses – (RFID) refers to a wireless system There is nothing more frustrating transit and in the warehouse. example, has reported it has been less inventory. they went from number one to obliv- comprised of two components: tags for a consumer to visit a store and be In Copenhagen, I watched a sales- able to reduce stock-in-trade by 5%. The retail industry is digitising ion overnight. and readers. told a specific item is out of stock. person using a scanner to stocktake This is equal to $113 million cash like many other industries, the ques- In my experience as a fashion The reader is a device that has This problem has already been the ground floor of a Zara store in flow improvement based on stock tion is are you a smart (phone) or an retail consultant, I would classify at one or more antennas that emit solved by the largest retailers in the half an hour for the specific purpose levels at 31 January 2020. analog laggard (phone)? ■ 6 INVENTORY POWERED BY INVENTORY POWERED BY 7 Future Forward: 2020 and beyond Having pivoted its inventory management during COVID-19, Australian womenswear chain Kookai is now exploring RFID. By Assia Benmedjdoub HEN ROB CROMB and search and merchandising solu- “Australian styles often feature “Now that our factories are back to Danielle Vagner launched tion decreasing search exit rates, in their top 10 best sellers every running at full capacity, we are able Kookai Australia in 1990, increasing search conversion and week and in an effort to align the to produce our next activewear col- Wthe brand’s trajectory was predicted overall site conversion. collections and improve processes, lection out of our own factory in Fiji, to be a typical one. It has also transitioned to a global there will be a lot more Australian and in turn we’ve now got a local sup- Under a franchise agreement with digital marketing platform, allowing product and styles ranged into plier should any issues arise again the French founders, the pair could it to enhance CX via personalised their seasonal collections. in future.” scale its Australian operations and communication through in-store “Now that our Fiji and Sri Lanka In fact, Vagner-Cromb says long- sell back to Paris. and digital behaviour. manufacturing facilities are pro- term disruption caused by COVID- Instead in 2017, Cromb struck a This will continue through to ducing collections for both regions 19 will force retailers to digitise deal with Vivarte to purchase its stock on hand, Vagner-Cromb says. globally, our factories are almost and reorganise their entire supply global network and bring the brand’s “We are currently looking into at full capacity with the increased chains, from production to post. 235 stores under a united vision.